Table of Contents

1. Introduction: Integrity Over Commission

2. Scenario 1: Overpriced Listings vs. True Market Value

3. Scenario 2: Cash‑Flow Pitfalls in Rental Investments

4. Scenario 3: Unfavorable Financing & Timing Risks

5. The “No‑Go Checklist” for San José Investors

6. Conclusion

The Investor’s Dilemma: When a Trusted Realtor Advises Against Buying in San Jose

1. Introduction: Integrity Over Commission

A REALTOR®’s highest duty is to their client’s interests. While many agents chase every close, Block Change Real Estate’s ethos is simple: never push a deal that could harm your long‑term returns. By knowing when not to buy, you preserve capital, avoid stress, and position your portfolio for true growth.

2. Scenario 1: Overpriced Listings vs. True Market Value

Even in hot ZIPs like 95148 (Evergreen) or 95123 (Silver Creek), price appreciation can stall.

• Stretched Comps: If recent sales on your block closed at $1.2M but current listings start at $1.5M, that $300K gap signals a potential correction.

• Pending vs. Active Ratios: A balanced market (50% pending, 50% active) suggests fair competition; an 80% pending ratio can indicate frenzied, unsustainable pricing.

• Mean vs. Median Distortions: High‑end sales can raise the “mean” price while the median remains flat—masking a buyer’s market underneath glossy headlines.

How to apply:

• Pull the last ten comparable sales within a one‑mile radius.

• Compare average days on market: 10 days suggests over‑aggressive pricing; 30+ days hints at seller concessions.

• Map price trends by block, not citywide, to see micro‑shifts.

3. Scenario 2: Cash‑Flow Pitfalls in Rental Investments

A great property must perform as advertised:

• Inflated ADU Rents: Brokers may quote high-end ADU rents ($3,000/mo) while local listings cluster at $2,000–$2,200.

• Hidden Maintenance Costs: Silver Creek’s strict HOA rules often require expensive exterior upkeep—factor $5,000–$8,000 annually, not just the $1,200 HOA dues.

• Vacancy & Turnover: Evergreen school cycles can spike vacancies in summer; build in 10–12% annual vacancy allowance, not 5%.

How to apply:

• Run a 12‑month P&L before you buy: real rents, real taxes, real HOA + maintenance.

• Speak with local property managers for actual vacancy rates and cost overruns.

4. Scenario 3: Unfavorable Financing & Timing Risks

Locking in the wrong loan or rushing can cost you:

• Rising Rates: A 0.5% increase on a $1.5M loan costs $6,250 more per year in interest. If your purchase depends on 3.5% financing, and current offers are 4.0%, delay until rates trend down.

• Appraisal Gaps: In fast‑moving markets, appraisals can lag. A $1.4M contract on a home appraised at $1.3M forces you to cover the gap or renegotiate—be prepared to walk if the seller won’t adjust.

• Seasonal Timing: Late summer can mean motivated sellers but fewer buyers; early fall may tighten inventory further. Align your financing lock‑in with favorable seasonal demand.

How to apply:

• Run rate‑sensitivity scenarios: What if rates rise another 0.25% before closing?

• Confirm lender’s appraisal and underwriting timelines; don’t assume 30‑day closings if appraisals back‑up.

5. The “No‑Go Checklist” for San José Investors

If any trigger appears, your trusted realtor should advise against moving forward—no exceptions.

6. Conclusion

True trust in real estate means knowing when to say “no.” By applying this data‑driven approach, Block Change Real Estate safeguards your capital, reputation, and peace of mind.

Next time an Evergreen or Silver Creek deal glitters, run it through this guide—your best investment may be walking away.